Medium-term Outlook (Spot Gold)

Gold prices are expected to trade within the range $837 - $770. Breaking of either level may decide the direction. $801 may act as the major resistance followed by $824 and $836. Supports are $754 and $744.

Crude oil January in NYMEX traded in the range $85.82 - $90.73 and closed at $90.23 ($87.49).

Crude oil inventories fell by 8 million barrels to 305.2 million barrels for the week ending Nov 30, according to the latest inventory report by US Energy Information Administration released on Wednesday.

The Organization of Petroleum Exporting Companies (OPEC) had opted to hold its output steady during the meeting on Dec 5, overriding speculations that the cartel might decide to raise its output.
Last day, MCX gold February opened at 10239, traded in the range of Rs 10098 – Rs 10333 and closed at Rs 10302 per 10 gram.
Copper February in MCX opened at 268.10, traded in the range 264.40 – 269.65 and closed at Rs 267.95 per kg.

Technicals – MCX (Intra day calls)

CRUDE OIL (December) BULLISH ABOVE 3484 BEARISH BELOW 3468

GOLD (February) BULLISH ABOVE 10275 BEARISH BELOW 10240

SILVER (March) BULLISH ABOVE 19225 BEARISH BELOW 19140
COPPER (February) BULLISH ABOVE 268.30 BEARISH BELOW 267.50

LEAD (December) BULLISH ABOVE 107.20 BEARISH BELOW 106.80

NICKEL (December) BULLISH ABOVE 1037 BEARISH BELOW 1033

ZINC (December) BULLISH ABOVE 95.50 BEARISH BELOW 95.10

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datas

Friday, 7 December 2007

all times GMT

(last release in parentheses)



0001 UK November NIESR GDP estimate (0.7%)

0900 Italy Q3 GDP (1.9% y/y)

1100 Germany October industrial production (0.3% m/m)

1100 Germany October industrial production (6.0% y/y)

1200 Canada November employment, net chance (63,000)

1200 Canada November unemployment rate (5.8%)

1330 US November change in non-farm payrolls (166,000)

1330 US November unemployment rate (4.7%)

1330 US November average hourly earnings (0.2% m/m)

1330 US November average hourly earnings (3.8% y/y)

1500 US December preliminary U. of Michigan consumer sentiment (76.1)

1700 Germany European Central Bank President Trichet speaks

outlook

February gold closed higher on Thursday and the high-range close sets the stage for a steady to higher opening on Friday.
Stochastics and the RSI are bullish hinting that a double bottom with November's low appears to be forming. Closes above the
20-day moving average crossing at 808.60 would confirm that a short-term low has been posted. If December extends last
week's decline, November's low crossing at 780.40 is the next downside target. First resistance is Wednesday's high crossing at
813.00 then the reaction high crossing at 844.20. First support is Monday's low crossing at 783.00 then November's low
crossing at 780.40.

March silver closed higher on Thursday and the high-range close sets the stage for a steady to higher opening on Friday.
Stochastics and the RSI have turned bullish signaling that a short-term low is in or is near. Closes above the 20-day moving
average crossing at 14.704 are needed to confirm that a short-term low has been posted. If March extends last month's decline,
the reaction low crossing at 13.500 is the next downside target. First resistance is the 20-day moving average crossing at 14.704
then the reaction high crossing at 15.220. First support is Monday's low crossing at 13.960 then the reaction low crossing at
13.500.

January crude oil closed higher on Thursday as it consolidates above the 38% retracement level of this fall's rally crossing at
.8741. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but
remain neutral to bearish signaling that sideways to lower prices are possible near-term. If January extends the decline, the 50%
retracement level of this fall's rally crossing at .8374 is the next downside target. Closes above the 20-day moving average
crossing at 93.01 would temper the near-term bearish outlook. First resistance is the 25% retracement level crossing at 91.51.
Second resistance is the 10-day moving average crossing at 91.60. First support is today's low crossing at 85.82 then the 50%
retracement level crossing at .8374.

anuary Henry natural gas closed higher on Thursday as it consolidates some of this week's decline but remains below broken
support marked by September's low crossing at 7.561. The mid-range close sets the stage for a steady opening on Friday.
Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-
term. If January extends the decline off November's high, weekly support crossing at 6.801 is the next downside target. Closes
above the 10-day moving average crossing at 7.499 would confirm that a short-term low has been posted. First resistance is the
10-day moving average crossing at 7.499 then the 20-day moving average crossing at 7.813. First support is Monday's low
crossing at 7.038 then weekly support crossing at 6.801.

GENERAL MARKET CONDITIONS

Nothing Official about precious metals and energies sharp rise after the Bank of England interest rate cut. I am more concerned about the plunge in base metals particularly lead, which fell nearly six percent. There was a technical breakdown in LME Lead 3 month, which resulted in the same closing at $2680. LME Lead 3 month has to hold $2356 else more losses will come. The fall prompted investors to exit lead and subsequent built in short positions. Technically lead is highly oversold but there could be more losses before a consolidation and next leg higher. Year to date returns in lead is still the highest among all the base metals at nearly forty percent so the fall in lead prices is nothing but year-end profit taking.

I will remember 2007 more for the fall in base metals and rise in crude oil prices. At the beginning of the year crude oil and copper prices plunged. Thereafter in towards the close of May Nickel prices plunged. From October and so far in December almost all the base metals fell but Zinc and Lead are the attractions. Base metals trading in new India is growing day by day. I find more and more investors preferring to trade in base metals in India than gold and silver, as they are a source of very high risk and very high return. Even I like to trade in base metals for intra day. I prefer gold and silver for investment purpose, which if invested at the right time gives maximum return. Base metals trading will only rise in India over the next few years. But once again high volatility in base metals is here to stay and one should determine his risk appetite before going long.

GOLD -- FEBRUARY FUTURE

Only a break of $818.30 will result in gains to $835.50 and $855. On the lower side as long as $797.90 and $790.30 are holding downside will be limited.